Jaguar Land Rover may shed 1,800 jobs; presure mounts on UK government news

19 January 2009

The current economic crisis has hit the automobiles industry hard and Jaguar Land Rover, the British luxury car maker owned by Tata Motors seems to be no exception with reports of substantial job losses on top of other measures if the government does not step in with a lifeline.

Analysts and MPs are increasingly urging the British government to extend the troubled company with a line of credit and live up to its pledge of September last year to help British car manufactureres remain competitive.

Since the announcement, however, the economy has entered a serious recession with UK car production figures falling by 23 per cent.

Last week, the Midlands-based Jaguar Land Rover announced plans for further job cuts following the 850 jobs lost before Christmas.

According to unions the losses could be the tip of the proverbial iceberg especially in view of the chief executive's warning that the improvement in the situation could take some time coming.

With other car manufacturers such as BMW, Nissan, Honda and Aston Martin having already laid off staff the UK car industry may be in serious trouble. Analysts point out that there may be serious implications to the continuing job losses in the car industry in UK beyong the personal tragedies of individual who are laid off.

They say that not only will it erode the manufacturing capabalities but also jeopardise the future structure of the economy. Jaguar Land Rover for instance is not only a provider of 75,000 jobs but is also a centre of engineering excellence in the Midlands, with an annual expediture of around £3 billion on R&D.

Governments in nearly all countries have stepped in to provide support to their auto industries. In France, President Sarkozy announced an emergency package before Christmas to troubled car makers; in addition they have also been pledged large-scale support.

In Spain, too the auto indutry has been assured millions of euros in aid from the government. The government in Sweden too has provided over $3 billion in support to the car industry.

In Germany, the government has extended support top car manufacturers including Opel to the extent of over €1billion in government loan guarantees. In Britain, however, the government has wasted weeks leaving the manufacturers in the lurch. industry, according to analysts.

For Jaguar Land Rover in particular, help from the government is still not forthcoming even after protracted talks with business secretary Lord Mandelson.

According to Jaguar Land Rover chief executive David Smith while the French, the Swedes and the Americans have taken action, the government in Britain has yet not offered the credit facilities requested, which would disadvantage the company against some of its competitiors.